Hilton Head Hospital accused of Medicaid kickback scheme

Hilton Head Hospital allegedly paid kickbacks to an island clinic that directed expectant mothers living in the U.S. illegally to the hospital as way to increase revenue from Medicaid, according to a recently unsealed federal whistle-blower lawsuit.

The lawsuit names Hilton Head Hospital as a defendant, saying that a Medicaid fraud scheme at several hospitals in the Atlanta area also involved the island hospital. Georgia has filed a lawsuit that parallels the federal suit and seeks to recover Medicaid money funneled through the state.

A spokesman for S.C. Attorney General’s Office said Thursday it was unaware of the federal lawsuit and has no plans for action against Hilton Head Hospital.

The suits claim hospitals operated by Tenet Healthcare Corp., including Hilton Head Hospital, and by Health Management Associates, another hospital company, paid clinics to recruit pregnant, undocumented Hispanic women for prenatal care, then referred them to the hospitals for deliveries and newborn care at Medicaid’s expense. The prenatal-care clinics were operated by a firm called Hispanic Medical Management.

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Federal and state laws prohibit hospitals from paying to have patients referred to them if the patients’ care will be paid for with federal health care programs, including Medicare and Medicaid. People living in the county illegally are not eligible for Medicaid coverage except in emergencies — and in those cases hospitals can be reimbursed for care. Medicaid considers childbirth an emergency condition.

“We believe the agreements between Hispanic Medical Management (HMM) and Hilton Head Hospital were appropriate, and that Hilton Head provided much needed health care services to underserved pregnant women,” according to an emailed statement from Tenet spokeswoman Ashley Walton.

It’s unclear how long the relationship between Hilton Head Hospital and Hispanic Medical Management lasted.

Hispanic Medical Management’s clinic on Hilton Head, Clinica de la Mama, closed in 2011, according to the email. The clinic opened in November 2006.

Hilton Head Hospital was the only Tenet hospital in South Carolina to have an agreement with Hispanic Medical Management or Clinica, according to Walton.

Prenatal care services for Hispanic women with or without insurance are now being provided by hospital-affiliated Hilton Head OB/GYN Partners’ Genesis Prenatal Clinic in Bluffton, according to Tenet and the clinic’s website.

Tenet says its contracts with Clinica de la Mama were for Spanish interpreter services needed by the pregnant women and other services “designed to improve obstetric care and increase the likelihood of a safe birth and a healthy baby” — not for referrals of pregnant patients.

“These services are important to addressing the health care gaps that affect many Hispanic patients and other minority communities,” according to the company’s statement.

But attorneys with U.S. Justice Department and the state of Georgia say the hospitals’ real aim was to increase their income from Medicaid-covered deliveries by offering kickbacks to Clinica for referrals by doctors with admitting privileges. The physicians also earned professional fees for the deliveries, according to the lawsuit.

“These hospitals allegedly paid Clinica kickbacks camouflaged as interpreter service payments to funnel emergency Medicaid patients their way and increase their bottom line,” Georgia Attorney General Sam Olens has said in a statement.

The lawsuits say the hospitals fraudulently billed Medicaid for tens of thousands of ineligible claims, and ask that the hospitals pay damages and penalties.

The whistle-blower, Ralph Williams, is a former chief financial officer for Walton Regional Medical Center, an HMA-owned hospital in Monroe, Ga. Williams discovered the payments to clinics soon after being hired in 2009.

Williams, who the government said was fired without reason soon after voicing concern about the payments, came across a contract the Georgia hospital had with Clinica for Spanish interpreter services, but found no evidence the services were being provided, according to the lawsuit.

Williams was later told by the director of nursing the hospital used interpreter services offered by AT&T via telephone when necessary, and never used the 24-hour interpreter services called for in the Clinica contract. She also said she was not familiar with Clinica personnel.

The director of obstetric services and human resources personnel likewise had no knowledge of Clinica rendering interpreter service to hospital patients, according to the suit.

Eventually, Williams learned Clinica was being paid for referring pregnant Hispanic women “for government subsidized deliveries.” The practice had begun as early as 2000 and was brought to the Georgia hospital by former Hilton Head Hospital vice president of business development Gary Lang, according to the suit.

Attempts Thursday to reach Lang, now CEO of Oasis Health International, LLC, were unsuccessful. Oasis is located on Hilton Head, according to Lang’s Linkedin profile.

According to the federal suit, Lang left Hilton Head Hospital in 2007 to become CEO at Walton Regional Medical Center. Lang and William’s predecessor had approval from two HMA vice presidents to enter into the agreements with Clinica de la Mama in 2008, the suit says.

Lang would later tell Williams he pursued the agreements because they had “generated large volumes of Medicaid deliveries” at Tenet’s Hilton Head Hospital, Atlanta Medical Center and North Fulton Hospital, according to the suit.

“HMA cloned its kickback model from Tenet for one primary reason, it worked,” the suit states. “... The more referrals they bought, the more profit there was to be made.”

Attempts Thursday to reach officials with Hispanic Medical Management, the firm that operated the prenatal clinics for Hispanic women, were unsuccessful.